101 F.

3d 684

NOTICE: THIS SUMMARY ORDER MAY NOT BE CITED

AS PRECEDENTIAL AUTHORITY, BUT MAY BE CALLED
TO THE ATTENTION OF THE COURT IN A SUBSEQUENT
STAGE OF THIS CASE, IN A RELATED CASE, OR IN ANY
CASE FOR PURPOSES OF COLLATERAL ESTOPPEL OR
RES JUDICATA. SEE SECOND CIRCUIT RULE 0.23.
MAJOR OLDSMOBILE, INC., Plaintiff-Appellant,
v.
GENERAL MOTORS CORPORATION, Defendant-Appellee.
No. 95-7595.

United States Court of Appeals, Second Circuit.

May 17, 1996.
1

APPEARING FOR APPELLANT: Martin G. Margolis, Margolis, Meshulam

& Pobereskin, P.C., Verona, NJ.

APPEARING FOR APPELLEE: Mary Elizabeth McGarry, Simpson Thacher

& Bartlett, New York, NY.

S.D.N.Y.

AFFIRMED.

Present: MESKILL, MINER, Circuit Judges, SCULLIN, JR.,* District Judge.

This cause came on to be heard on the transcript of record and was argued by
counsel.

Plaintiff-appellant Major Oldsmobile, Inc. ("Major") appeals from a judgment

entered in the United States District Court for the Southern District of New
York (Buchwald, then-Chief Magistrate Judge) granting summary judgment in
favor of defendant-appellee General Motors Corporation ("General Motors").

On January 28, 1991, Major entered into a Dealer Sales and Service Agreement

(the "Dealer Agreement") with General Motors. Under Article 4.2 of the Dealer
Agreement, Major was "responsible for effectively selling, servicing and
otherwise representing [Oldsmobile] Division's Products." Major was required
under the Dealer Agreement to conduct its sales operations at 56-02 Northern
Boulevard, Woodside, New York (the "Paragon Property"). Major, however,
failed to exercise its option to extend its lease on the Paragon Property. In
September of 1991, without the permission of General Motors, Major relocated
its Oldsmobile sales operations to property at 44-01 Northern Boulevard, Long
Island City, New York (the "Hinsch Property"). The showroom at the Hinsch
Property consisted of a canvas tent in which the automobiles were displayed.

In a letter dated November 14, 1991, General Motors warned Major that its
relocation of its sales operations without prior written approval was a breach of
Article 13.1 of the Dealer Agreement. On November 26, 1991, Major
submitted a proposal for the construction of a new Oldsmobile sales facility at
the Hinsch Property and requested approval for relocation to that property. On
July 1, 1992, General Motors approved Major's proposal.

10

Meanwhile, Major had engaged in discussions with Chrysler Corporation

("Chrysler") to operate a Chrysler/plymouth/jeep/ Eagle dealership at the
Hinsch Property. On October 23, 1992, pursuant to an Assignment of Lease, the
Hinsch Property was subleased to Major Chrysler Plymouth/Jeep Eagle, Inc.
Having learned of Major's intentions, General Motors began observing Major's
operations at the Hinsch Property. General Motors employees observed that,
between October 30, 1992 and November 10, 1992, "[t]here was no sales
operation with regards to facility, manpower and display" at the Hinsch
Property. On November 16, 1992, General Motors sent Major a Notice of
Termination, stating that the Dealer Agreement would be terminated fifteen
days after Major received the Notice. The Notice was issued pursuant to Article
14.5.3 and recited that termination was due to Major's failure to conduct
customary sales operations for seven consecutive business days.

11

On January 13, 1994, Major filed an amended complaint in the district court,
alleging that General Motors' termination of the Dealer Agreement breached
the Agreement and violated New York law. Major sought declaratory and
injunctive relief, as well as monetary damages. After conducting discovery,
both parties moved for summary judgment in December of 1994. In a
Memorandum and Order dated May 30, 1995, the district court granted
summary judgment in favor of General Motors. The district court found that
General Motors' termination of the Dealer Agreement was proper under both
the Agreement and New York law. This appeal followed.

12

In our review of a grant of summary judgment, "we apply the same standard as
the district court did in deciding the Rule 56 motion and determine de novo
whether a genuine issue as to any material fact exists, and if the moving party is
entitled to judgment on the merits." Taggart v. Time, Inc., 924 F.2d 43, 45-46
(2d Cir.1991). "Only when no reasonable trier of fact could find in favor of the
nonmoving party should summary judgment be granted." Id. at 46.

13

Major contends that the district court erred in granting summary judgment in
favor of General Motors because "there exists genuine issues of material fact as
to whether [Major] failed to conduct 'customary' sales activities for seven (7)
consecutive business days." We disagree. Under Article 14.5.3 of the Dealer
Agreement, General Motors could terminate the Dealer Agreement due to the "
[f]ailure of [Major] to conduct customary sales and service operations during
customary business hours for seven consecutive business days." New York law
also provides that a franchisor may terminate a dealer agreement due to "the
failure of the franchised motor vehicle dealer to conduct its customary sales and
service operations for a continuous period of seven business days." N.Y. Veh.
& Traf. Law 463(2)(d)(2).

14

Although Major contends that the term "customary sales and service
operations" is ambiguous, we agree with the district court that Major cannot be
said to have conducted customary sales operations when there was a cessation
of sales activities. General Motors offered evidence that "[t]here was no sales
operation with regards to facility, manpower and display" between October 30,
1992 and November 10, 1992 at the Hinsch Property. Major has failed to
present evidence that there were customary sales operations during this period
of time. Although Major points to evidence of a vehicle "swap" with another
dealer, deliveries of Oldsmobiles that previously had been sold, and newspaper
advertisements for all the Major dealerships, this is insufficient to show the
existence of customary sales operations involving Oldsmobiles at the Hinsch
Property.

15

Major, however, argues that, even if it failed to conduct customary sales

operations, this breach was caused by General Motors' failure to perform its
own contractual obligations. This contention is meritless. Because Major did
not raise this argument before the district court, it may not raise the argument
on appeal. See Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1077 (2d
Cir.1993) ("[A] party opposing summary disposition of a case must raise all
arguments against such remedy in the trial court and may not raise them for the
first time on appeal."). In any event, Major fails to point to any provisions of
the Dealer Agreement that General Motors failed to fulfill.

16

Major also argues that the Notice of Termination was invalid because it did not
specify all of General Motors' reasons for terminating the Dealer Agreement.
We disagree. Major did not raise this argument before the district court, and
thus Major is barred from raising it on appeal. See id. In any event, General
Motors specified in the Notice of Termination that it was terminating the
Dealer Agreement due to Major's "failure to conduct customary sales
operations in violation of [the] Dealer Agreement." Although Major asserts that
the Notice of Termination was inadequate because it did not set forth other
ways in which it breached the Dealer Agreement, General Motors was not
required to specify every conceivable breach by Major.

17

Finally, we reject Major's contention that General Motors was precluded from
terminating the Dealer Agreement because it had "wrongful" motives for the
termination. Major asserts that General Motors terminated the Dealer
Agreement in order to award an Oldsmobile franchise to a General Motorsowned "factory store." However, even if there were such ulterior motives on
the part of General Motors, these motives would not have affected its right to
terminate the Dealer Agreement. As long as a party has "the legal right to
terminate its obligation under the contract, it is legally irrelevant whether [the
party] was also motivated by reasons which would not themselves constitute
valid grounds for termination of the contract." Refinemet Int'l Co. v.
Eastbourne N.V., 815 F.Supp. 738, 742 (S.D.N.Y.1993), aff'd, 25 F.3d 105 (2d
Cir.1994).

18

We have considered Major's remaining contentions, and we find them all to be

without merit.

The Honorable Frederick J. Scullin, Jr. of the United States District Court for
the Northern District of New York, sitting by designation